System and method for authorizing financial transactions with online merchants

Abstract

A system for authorizing a financial transaction of a financial presentation device such as a credit or debit card being presented from a customer to an online merchant. The system includes a peripheral device having a processor configured to generate a dynamic verification value for the card which changes for each financial transaction, and to transmit the dynamic verification value to a user computer via an I/O interface during an online transaction. The system also includes an authentication computer having a memory for storing information used to generate a comparison verification value, a communication device for receiving the dynamic verification value originating from the peripheral device, a processor and an authentication module executable by the processor adapted to generate the comparison verification value using information stored in memory. The authentication computer determines whether to authorize the financial transaction based on whether the comparison verification value matches the received dynamic verification value.

What is claimed is: 
     
       1. A method, comprising:
 maintaining, by an authentication computer, variable data that changes for each of a plurality of financial transactions, the variable data that changes for each of the plurality of financial transactions being a time-based number; 
 receiving, by the authentication computer and from a computing device as part of a financial transaction conducted with a financial presentation device, a dynamic verification value generated uniquely for the financial transaction by a peripheral device distinct from the authentication computer, computing device, and financial presentation device, the peripheral device independently storing a copy of the variable data changes for each of the plurality of financial transactions, wherein the dynamic verification value is generated based at least in part on data from the financial presentation device and the copy of the variable data maintained by the peripheral device, wherein the peripheral device is caused to:
 receive a request from the computing device for the dynamic verification value, the request including details of the transaction; 
 transmit the dynamic verification value to the computing device; and 
 update the copy of the variable data upon transmitting the dynamic verification value to the authentication computer; 
 
 responsive to receiving the dynamic verification value, generating, by the authentication computer, a comparison verification value, the comparison verification value being based at least in part on data from the financial presentation device and the variable data that changes for each of the plurality of financial transactions; 
 responsive to the generated comparison verification value, updating, by the authentication computer, the variable data such that the variable data changes for each of the plurality of financial transactions; 
 responsive to generating the comparison verification value, comparing, by the authentication computer, the comparison verification value with the dynamic verification value; and 
 determining, by the authentication computer, whether to authorize the financial transaction based at least in part on the comparison between the comparison verification value and the dynamic verification value. 
 
     
     
       2. A method in accordance with  claim 1 , wherein the peripheral device comprises a USB device connectable to the computing device with a USB port. 
     
     
       3. A method in accordance with  claim 1 , wherein the peripheral device corresponds uniquely to the financial presentation device. 
     
     
       4. An authentication computer system configured to, at least:
 maintain variable data that changes for each of a plurality of financial transactions, the variable data that changes for each of the plurality of financial transactions being a time-based number; 
 receive, from a computing device as part of a financial transaction conducted with a financial presentation device, a dynamic verification value generated uniquely for the financial transaction by a peripheral device distinct from the authentication computer system, computing device, and financial presentation device, the peripheral device independently storing a copy of the variable data changes for each of the plurality of financial transactions, wherein the dynamic verification value is generated based at least in part on data from the financial presentation device and the copy of the variable data maintained by the peripheral device, wherein the peripheral device is caused to:
 receive a request from the computing device for the dynamic verification value, the request including details of the transaction; 
 transmit the dynamic verification value to the computing device; and 
 update the copy of the variable data upon transmitting the dynamic verification value to the authentication computer; 
 
 responsive to receiving the dynamic verification value, generate a comparison verification value, the comparison verification value being based at least in part on data from the financial presentation device and the variable data that changes for each of the plurality of financial transactions; 
 responsive to the generated comparison verification value, update the variable data such that the variable data changes for each of the plurality of financial transactions; 
 responsive to generating the comparison verification value, compare the comparison verification value with the dynamic verification value; and 
 determine whether to authorize the financial transaction based at least in part on the comparison between the comparison verification value and the dynamic verification value. 
 
     
     
       5. One or more non-transitory computer-readable media collectively storing thereon computer-executable instructions that, when executed with one or more computers, at least:
 maintain variable data that changes for each of a plurality of financial transactions, the variable data that changes for each of the plurality of financial transactions being a time-based number; 
 receive, from a computing device as part of a financial transaction conducted with a financial presentation device, a dynamic verification value generated uniquely for the financial transaction by a peripheral device distinct from the one or more computers, computing device, and financial presentation device, the peripheral device independently storing a copy of the variable data changes for each of the plurality of financial transactions, wherein the dynamic verification value is generated based at least in part on data from the financial presentation device and the copy of the variable data maintained by the peripheral device, wherein the peripheral device is caused to:
 receive a request from the computing device for the dynamic verification value, the request including details of the transaction; 
 transmit the dynamic verification value to the computing device; and 
 update the copy of the variable data upon transmitting the dynamic verification value to the one or more computers; 
 
 responsive to receiving the dynamic verification value, generate a comparison verification value, the comparison verification value being based at least in part on data from the financial presentation device and the variable data that changes for each of the plurality of financial transactions; 
 responsive to the generated comparison verification value, update the variable data such that the variable data changes for each of the plurality of financial transactions; 
 responsive to generating the comparison verification value, compare the comparison verification value with the dynamic verification value; and 
 determine whether to authorize the financial transaction based at least in part on the comparison between the comparison verification value and the dynamic verification value.